Get out of Jawa 9 and 10!

Southeast Asia needs clean energy not more polluting coal power.

Serious concerns exist about banks’ consideration of finance to Jawa 9 and 10 (Banten Suralaya), a 2,000 MW coal-fired power project in Banten province in Indonesia. Given the reputational, legal and environmental risks associated with Jawa 9 and 10, corporations associated, such as DBS, Siemens, Korean public banks, Malaysian and Indonesian banks should distance themselves from it.

A recent report modeling the health impacts of the project found that Jawa 9 and 10 will cause 4,700 premature deaths over its lifetime.

Banten Suralaya, September 2018

This 2,000 MW project is expected to use ultrasupercritical technology.

Risks associated with the project

Community concerns and legal challenges

Jawa 9 and 10 form a part of a legal action in Indonesia. In July 2019, a civil suit was filed against the President, the governor of Jakarta and other officials for failing to address air pollution levels in Jakarta. Pending projects such as Jawa 9 and 10 have been cited as part of the problem.

A 2017 Greenpeace report models the negative impact of the coal-fired power plants that operate within 100 kilometres of Jakarta, and include the impact of pending projects.

The area around the project is an industrial area with several coal power projects:

660 MW Banten Serang supercritical coal power project

600 MW Banten Labuan coal power project

945 MW Banten Lontar subcritical coal power project

120 MW Merak Energi coal power project

200 MW PT Krakatau Posco Energy coal power project

400 MW PT Krakatau Daya Listrik coal power project

300 MW PT Dian Swastika Sentosa coal power project

40 MW Cilegon PTIP power station to power the Indorama petrochemical plant

300 MW Asahimas Chemical coal power project

1,982 MW Jawa 7 supercritical coal power plant (projected in service in 2020)

The issues with these projects will only be exacerbated by Jawa 9 and 10.

Banten Suralaya, March 2019; photo credit: Trend Asia

Wasted electricity, wasted investment

If built, Jawa 9 and 10 will do little to help the average Indonesian get access to electricity and will lead to wasted electrical capacity.

In July 2018, the Indonesian Corruption Eradication Commission (KPK) arrested Eni Mulani Saragih (Eni), the deputy chair of the House of Representatives (DPR) Energy Commission and Johanes Bidisutrisno Kotjo (Kotjo). Eni was alleged to have received IDR$4.8 billion from Kotjo, to facilitate a company in which Kotjo was a shareholder to become the sponsor of a coal power project in Indonesia.

Coal barge on fire off the coast of Banten Suralaya, March 2019; Photo credit: Trend Asia

What should banks and investors do?

Given these concerns, Siemens, DBS, as well as Korean public institutions, andMalaysian and Indonesian banks, contemplating lending to this project should be considering the risks of Jawa 9 and 10 as an investment. Investors in the banks or sponsors of Jawa 9 and 10 should similarly be questioning these companies about the risks inherent in this project.